Bicycle Built For You?

According to the U.S. Patent and Trademark Office, there were
more than 4,200 bike-related patents issued between 1996 and
2000-do the math, and you're talking more than 800
patents per year and more than two bike patents per day. According
to Bicycling magazine senior editor Garrett Lai, bikes have always
been a product category with plenty of patent action. "Bikes
are accessible, people can see all the parts and how they work, and
they can create a new bike innovation in their garage," he
says.

It's true-inventors come up with new bike inventions
all the time. During our interview, Lai reeled off a quick list
that included Paul Turner, creator of RockShox, the first
commercially viable front suspension system, and Rolf Dietrich,
inventor of Rolf Wheels, which are now featured on Trek bikes. Both
inventors started on their own, like so many others before them,
before eventually selling off their businesses to big
companies.

But there's another reason so many bike inventors are
successful: The market tends to favor inventor introductions.
It's a product category where consumers and bike shop owners
can easily see that your product is different-and maybe even
better-than competitors'. Not to mention, in the bike
market, you have a network of distributors ready and willing to
sell your product. Few, if any, product categories make it this
easy on inventors.

Getting A Foothold In The Bike Market

In the bicycle business, you have not just one, but three viable
ways to get a foothold in the market. Here they are:

1.Get coverage in a trade magazine. Lai
estimates that new product reviews make up at least 50 percent of
his magazine's content. That's good news for inventors like
Carl Winefordner (see "Crankin' 'Em
Out.")

Winefordner always sends samples of new products to publications
in hopes of scoring press coverage. "We've never spent a
dime on advertising," says Winefordner. "The product
reviews work out better than advertising because [they're]
viewed as impartial."

Erik Koski also relies on magazine reviews. They were a big help
in establishing his initial product, DuraTrac. "Bike
manufacturers read the positive reviews and then decide to test
inventors' products," he says. Winefordner and Koski say
there are between 10 and 20 key bike trade magazines focusing
heavily on new products.

2.Attend a trade show. That step alone helped
Winefordner build an instant distribution network. "We went to
the Anaheim, California, Interbike show [now held in Las Vegas] in
1997," he recalls. "We'd given out samples of the
Speed Lever to magazines and some distributors before that, but we
were overwhelmed by the incredible response at our show. We had
distributors from all over the world asking to see our
product." Another good trade show guaranteed to give your
invention exposure to worldwide distributors is the CABDA (Chicago
Area Bicycle Dealers Association) Cycling Expo held every
October.

3.Set up booths at races. That allows racers
to try out the newest innovations firsthand to see if they'll
help them gain that coveted 1 to 2 percent speed advantage over
their competitors. Although racers are always anxious to find new
products, they're also hard critics who expect high
performance. Says Koski, "Many more inventors fail than
succeed by displaying their products at races."

Crankin' 'Em
Out
Frank Hermansen, 41, and Carl Winefordner, 40, may own a business
called Crank Brothers, but they're not actually brothers at
all. In reality, the name stems from the fact that people used to
constantly mistake the friends as siblings and refer to them as the
"Crank" (Carl + Frank = Crank) brothers. When it came
time to name their bicycle accessories designing and manufacturing
company in Laguna Beach, California, the nickname just seemed a
natural choice.

The pair introduced their first product, the Speed Lever, in
1997 at the Anaheim, California, Interbike show. They made quite a
splash with distributors by giving away 4,000 units for free.
Inexpensive to produce, the product removes bike tires or installs
them on the bike rim in mere seconds.

But there were more inventions to come. In 1998, the company
introduced the Power Pump, a 5Â½-inch air pump that can be
easily carried while biking. It has a unique feature-an air
switch that allows the pump to go from high volume to high
pressure. And then, in 1999, the company added a Power Pump Alloy,
a 9.3-inch aluminum pump with a gauge.

Succeeding In The Market

Although not all inventors can succeed in the bicycle products
category, certain attributes make this market stand out from others
in terms of accessibility. As mentioned earlier, consumers can see
the unique advantages of a bicycling invention. Compare that with a
product such as a drip coffee maker, where buyers can't
actually see the unique innovation hidden inside, such as a new and
improved brewing system. Bikes don't have any such hidden
parts. In addition, most bike riders actually understand what each
part does. This aspect of the bike business means that every bike
shop employee, sport-savvy consumer, bike enthusiast, racer and
bicycle magazine writer can immediately distinguish which products
are new and different-helping inventors get their products
noticed and evaluated.

Lai, Winefordner and Koski all agree that the easy accessibility
and visibility of product features is a key reason so many
inventors are able to get new bike products on the market. "I
tell bike manufacturers that consumers will notice that their
products are different if they buy my components," says Koski.
"It's one way bike manufacturers can differentiate their
products."

But in order for consumers to be able to purchase your product,
you need to find a distributor who can take it to retailers
worldwide. According to Winefordner, there are more than 100 bike
distributors. "Bike distributors will pick your product up if
you get good reviews in bike magazines and create product awareness
at trade shows or through an advertising program," he says.
Bike distributors typically carry around a big catalog of items,
and they're always open to competitively priced and innovative
products from inventors.

The catch? Distributors require an extra layer of markups, which
usually means the manufacturer will only get 33 to 35 percent of
the final suggested retail price. "The distributor typically
takes a 28 to 35 percent margin, then the stores mark the product
up 100 percent," says Winefordner. So if the store pays $10 on
a $20 product, the distributor will make $2.80 to $3.50.

Once you find success with your bike product, expect
manufacturers to come knocking on your door before long. Most of
them are anxious to buy out potential competitors, and most bike
inventors are more than happy to either sell their ideas or set up
licensing agreements rather than try to run their own
businesses.

The difficulty level of introducing a new product varies
tremendously by industry and market. Inventors will have more
success in those markets where favorable conditions
exist-such as the bicycle product category. If you've
created several different products, study the market conditions and
choose the market best suited to inventors. You'll still need a
great product to succeed, but if the choice exists between two
markets-one easy and one hard-why not take the road of
least resistance?

Back in 1985, Erik Koski's family owned Cove, a bike shop in
Tiburon, California. In those days, shops put together mountain
bikes out of whatever components they could pick up. Perhaps not
surprisingly, that early exposure inspired Koski, now 48, to become
a full-time inventor. His first invention was the DuraTrac, a rigid
fork for front tires that he sold prior to the introduction of
front suspension. Koski advertises in catalogs and sells the
products through OEM (original equipment manufacturer) agreements,
meaning manufacturers use his components on their new bikes.

Koski then worked for several bike manufacturers before deciding
to form Koski Engineering, a Mill Valley, California-based mountain
bike components designer, in 1994. His business strategy is still
to provide bike manufacturers with components that differentiate
their bikes from the competition. To date, he's developed
products that improve handlebars, handlebar stems and saddle seats.
His next two goals: first, to have his products look and act
different from the components developed by other competitors,
including Shimano, a Japanese company that supplies most of the
components bike manufacturers use. And second, he'd like to
create products with better durability.

Thanks in part to help from his own OEM sales force, Koski
estimates his 2001 sales will exceed $3 million.

Being serial inventors has certainly paid off for these
"brothers" in business: Sales last year neared $1
million. Winefordner credits that success in part to his strong
team of distributors: "Distributors are an ideal solution for
small companies that can't afford their own sales
representatives."